Where will Arizona grow the most jobs?

PHOENIX — The biggest share of jobs Arizona will create in the next two years will be in positions that don’t require even a high school diploma.

New figures Thursday from the state Department of Administration show that sector of the economy will increase by more than 6.6 percent. And the second biggest boost in Arizona employment will be in jobs for which only a high school diploma is required.

By contrast, the jobs for which a bachelor’s or master’s degree will be required will grow by less than 5.2 percent. And those who went back for a doctoral degree will find just a 4.2 percent increase in available jobs.

But Daniel Scarpinato, press aide to Gov. Doug Ducey who has committed to growing the economy and creating high-wage jobs, said the numbers are not necessarily bad news.

“What the numbers show is all those numbers are growing faster than they were, all levels are growing faster than they were,’’ he said. “And that’s a good thing.’’

But the numbers also show a trend: The part of the Arizona economy which needs workers with only a high school diploma or less is growing faster than the sector of the economy which needs college graduates.

Right now, for example, 27.4 percent of all jobs in the state require no formal education credentials. In just two years that will grow to 27.7 percent. That’s the largest growth rate of any sector of the economy; the share of some sectors will shrink.

The Center for the Future of Arizona indicates that by 2020, 35% of jobs will require a bachelor’s degree, 30% will require some college or industry certifications, and 36% will require a high school diploma.

According to Alexandra Wright, director of the Yavapai College Regional Economic Development Center, “An economy is driven by the community within which it rests, wage scales should match value produced and service sector jobs will always increase at a faster rate than professional occupations; but an economy can be stimulated by innovation and an entrepreneurial culture that is fostered by the local region. So let us not dismiss the value of education and a creative spirit so quickly, there are multiple variables at play and investment in human capital will undoubtedly produce a large return for our local economies in the end.”

Since the downturn in 2008, Yavapai County has seen the greatest growth in service oriented positions, reported Wright. About half the occupations are in the hospitality sector and have median hourly wages of between $8.87-$10.16, the other half are mostly in the health care field (with a splattering of jobs in education and animal husbandry) with median hourly earnings between $9.41-$35.15.

“When you look at some of the specific job recruitments that the governor has been involved in, they are in fact ones that are very good paying jobs and that are high-skilled jobs,’’ he said. But Scarpinato said it takes more than that to make an economy.

“The governor has been very clear that all jobs matter, all jobs have value, and all citizens, no matter their educational background, deserve a shot at the American dream,’’ he said. “And so we’re going to be working on things that grow jobs across all sectors for all individuals in our state, not just the wealthy and not just people with a college education.’’

Doug Walls, research administrator at the Department of Administration, said there may be another reason that the rate of job growth is highest among employers who need workers with just a minimal education.

“The base employment levels could have fallen much farther during the recession,’’ he said. “We could have lost a lot more jobs within those minimum education-requirement groups and they could now just be seeing recovery.’’

Walls had no specific numbers to back that contention.

But he did point out that it was the state’s construction industry that took the biggest hit during the recession. It plummeted from a seasonally adjusted peak of 244,200 in June 2006 to 109,300 just three months later.

The most recent report has construction at 133,700, meaning it has regained about half the jobs it shed.

But economist Lee McPheters of the W.P. Carey School of Business at Arizona State University, said there’s another big factor at work that is making the Arizona economy less dependent on jobs where a higher education is required: Money, or, more specifically, the lack of it.

He said someone who graduates with a degree in engineering probably can find a job in Arizona. But McPheters said companies elsewhere offer more.

And McPheters said he’s not just talking places like San Francisco where the cost of living is so much higher. He said entry-level programming jobs pay more in Austin, Denver and Salt Lake City.

“Probably, they need to finish that statement by saying there’s a shortage of qualified skilled labor at the prevailing wage rates here,’’ he said.

As proof, McPheters said nursing jobs pay as much in Arizona as they do elsewhere as hospitals are forced to compete. But he said software developers and others have instead counted on the “sunshine factor’’ to convince folks to work for less in Arizona.

That only works so long.

“People have options,’’ he said. “It’s a competitive world.’’

Still, Arizona is creating lots of jobs.

The latest report from the Department of Administration shows the state’s seasonally adjusted jobless rate dropped a tenth of a point last month, to 5.4 percent. And the state added 12,300 private sector jobs in the past month -- and 86,000 since last year.

The biggest job growth came in bars, restaurants and hotels with 7,300 new jobs added between February and March.

“Arizona’s economy, in general, has always been based on population growth, hence service sectors have been a primary economic driver. Yavapai County has followed suit with healthcare and hospitality occupations topping the charts for fastest-growing and greatest number of jobs over the past eight years,” said Wright.

“That said, management, administrative professionals, social and human service professionals, engineers, and technicians across all fields have also experienced an increase in demand in Yavapai County over the same time span with exponential growth in the last two years.”